World Bank GEI - PWYP Montreal Conference 2009


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Special session hosted by the World Bank on Multi-stakeholder Engagement for Improved Governance along the Value Chain.

Michael D. Jarvis , Private Sector Development Specialist , World Bank Institute

Kathrin Frauscher, World Bank Institute

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  • Accountability truncated by colonialisation and the cold warTransparency/Information is the currency of accountabilityAccountability to donors can be dangerous
  • Michael talked a bit about the current reality and challenges of extractive industries and I wanted to quickly add-on how the World Bank Institute sees these challenges and MORE IMPORTANTLY how we hope to work together with others on this. I chose to share this quote of Alfred Einstein with you, because we believe that naturalresource management is a very complex issue that requires innovative thinking by all groups of society.  No single actor has “the answers”, but what we believe, and what we are trying to do, is tobring together groups of committed individuals and organizations to reflect TOGETHER was we might do about this situation and take JOINT actions.
  • And our impression is that there might be an opportunity to work together, across stakeholder groups, on improving accountability along the value chain. What do we mean by accountability?As Michael explained, you can think about the value chain having 3 dimensions:Technical provisions: laws and regulations – sector law that determines how contract are supposed to be awarded Capable institutions: agencies and organizations that are involved in the management of EI – the ministry of energy or the procurement agencies handling the bidding processAccountability: monitoring, transparency and stakeholder participation – how stakeholder can access information about new discoveries/upcoming bid rounds (allows those affected by decisions and transactions to know basic facts, figures, mechanisms and processes), - how stakeholders/third parties oversee the contract awarding process (allows stakeholders to oversee the design, implementation and progress of policies and projects), - how they participate in the decision making that leads to the awarding (when, which bidding system, etc) (allows stakeholder to take part in decision making, goal setting, profit sharing.)
  • I wanted to give you a few example of what accountability innovations can look like. I will not go through them in detail, because you have them in your handout. But, one commonalty that I wanted to point out is that many of these examples brought together more than one stakeholder group (Liberia).We see opportunities for more of these types of accountability innovations especially if you look at knock-ons and spin off of EITI along the other links.
  • So, what are we proposing to do to improve accountability?We assume that working across stakeholder and building a team of people and organization is key to address governance challenges.We are proposing to facilitate a process that will help Key EI stakeholders in countries to come together to understand applicable good practice; Jointly identify and prioritize EI vulnerabilities and entry points for stakeholder action on good governance; Together managing reform design and implementation. Because this is where reforms often fail, in the implementation stage when it is crucial to navigate through the challenges. Working together on implementation.We believe that having a multi-stakeholder team working on this challenges will help to get to the ‘improved state’.
  • We are trying to build a new program around this multi-stakeholder process that would put all of you in the driver seat to work together on innovative ideas and solutions to improve accountability along the value chain.Under this new program WBI’s role would be to Facilitate and support the process of coming together and jointly analyze, prioritize and facilitate accountability actions. Promote experience exchange across countries and regions. Together with a network of experts provide training and assistance as needed.
  • To operationalize the program we are thinking of implementing an action learning process that combines learning on the country level with a regional and global support structure.We already talked about the country level process. In program countries, stakeholder would come together and go through the four steps that we already discussed: Coming together – analyzing the current state and prioritizing entry points- implementing joint actions (from something small like newspaper article to implementation of new laws- evaluation of progress.A local support team will facilitate the country learning process. The team will consist of a country facilitator - to help with coalition building process, design and implementation of action plans and accompanying communications strategy; a governance coordinator - to help with identification of governance gaps and design of action plans; and a local World Bank expert - to ensure alignment with ongoing extractive industries efforts.Throughout this process, the country group will benefit from access to global expertise to strengthen their technical understanding of the procurement processes and options for reform. At the same time the group’s leadership skills are strengthened to help them develop the individual and team capacities needed to undertake a complex reform. Leadership tools, such as an outreach and communications plan to mobilize support for reform and a rapid results framework to ensure focus on key priorities, are integrated into the action plan.The importance of coalition building for well managed extractive industry reform is reinforced by the example of Botswana. The government initiative to build a strong coalition with DeBeers Diamond Corporation is “a relationship epitomized and institutionalized in the ownership of the diamond industry and sharing of diamond revenues…” It has resulted in a well-managed sector and stronger development outcomes. (source: Sebudubudu and Moutsi. Draft Policy Briefing Note, March 2009)
  • World Bank GEI - PWYP Montreal Conference 2009

    1. 1. Harnessing <br />Extractive Industries <br />for Development Impact <br />Turning commodity price windfalls into benefits for poor people <br />Michael Jarvis, Private Sector Specialist, WBI<br />Kathrin Frauscher, Governance Specialist, WBI <br />
    2. 2. Overview of session<br /><ul><li>Introduction - the value chain approach
    3. 3. Governance for Extractive Industries program
    4. 4. Reactions and sharing of country experiences
    5. 5. Open discussion </li></li></ul><li>Political and institutional dimensions are the most important determinants of how countries with extractive industries perform<br />Countries which have weak institutional contexts have their weaknesses exacerbated and oil becomes a curse rather than a blessing<br />3<br />The institutional dimension of extractive industries<br />
    6. 6. Extractive Industries: not a sector but a pathology …<br />Conflict<br />Corruption<br />Damaged social contract/compact<br />Difficult macroeconomics: volatility; excessive borrowing; low savings rate; Dutch disease<br />Lack of diversification/enclave effects<br />Insufficient investment in human resources<br />Damaged democracy and human rights<br />All leading to low growth<br />4<br />
    7. 7. Accountability<br />In this world accountability, transparency, and participation assume greater importance than ever<br />Need to rebuild accountability<br />Accountability = Transparency + Participation<br />5<br />
    8. 8. Accountability institutions include:<br />Parliament<br />Audit offices<br />Political parties<br />Civil society organizations<br />Media<br />Academia and think-tanks<br />Judiciary<br />Business and professional associations<br />The ‘public sphere’<br />6<br />
    9. 9. Extractive industry value chain approach<br />7<br />Non-renewable resources<br />Sustainable Development<br />EITI<br />
    10. 10. No problem can be solved by the same consciousness that created it. We must learn to see the world anew.<br /> – Albert Einstein <br />
    11. 11. Deciding to extract the resources<br />All 3 dimensions relevant at all stages<br /><ul><li>Technical provisions
    12. 12. Capable institutions
    13. 13. Accountability</li></ul>The value chain approach<br />Transparency of policies, processes, decisions and information<br />Effectivemonitoring<br />Participation of those affected by extractive industries<br />
    14. 14. A few examples of accountability innovations<br />
    15. 15. How do you get strong accountability along the value chain?<br />Strong<br />Accountability<br />Dynamics<br />Improved state<br />Navigating the HOW<br />Compromised<br />Accountability<br />Dynamics <br />Group of multi-stakeholder leaders with complementary skills to implement transparency and accountability actions<br />Status quo<br />
    16. 16. A new partnership on the ‘how to’ ofmulti-stakeholder governance innovations for extractive industries<br />Key expected results:<br /><ul><li>Better understanding on the ‘how to’ of EI governance innovations.
    17. 17. Implementation of actions and reforms for greater transparency and accountability in EI in target countries.
    18. 18. Better locally owned processes and plans that sustain active stakeholder participation in EI good governance monitoring.
    19. 19. Increased individual and collective competency among stakeholders in working together on EI governance. </li></ul>Objective:<br /><ul><li> Improve country capacity to enhance transparency, accountability and participation along the EI value chain through multi-stakeholder governance.</li></ul>Role of WBI:<br /><ul><li> Facilitate and support the process of coming together and jointly analyze, prioritize and facilitate accountability actions.
    20. 20. Promote experience exchange across countries and regions.
    21. 21. Together with a network of experts provide training and assistance as needed.</li></li></ul><li>Action learning is at the core of the program<br />Scoping<br />Monitoring<br /><ul><li>Evaluate and feedback
    22. 22. Stakeholders come together
    23. 23. Foundation workshop</li></ul>Country Level<br />Regional and global support structure<br />Implementing<br />Planning<br /><ul><li>Undertake joint actions
    24. 24. Strengthen leadership skills
    25. 25. Institutionalize solutions
    26. 26. Share experiences & help each other
    27. 27. Analyze governance gaps and reform entry points
    28. 28. Prioritize & develop action plans</li></ul>Practitioners network<br />Online knowledgeplatform<br />Technical and change management support<br />
    29. 29. Next steps:<br /><ul><li>Consultation workshop in Accra in December 2009
    30. 30. Launch of program in Spring/Summer 2011
    31. 31. Focus on establishing ‘clubs’ to work on a few critical spots on value chain</li></ul>Potential priority countries from among:<br /><ul><li>Democratic Republic of the Congo
    32. 32. Ghana
    33. 33. Mozambique
    34. 34. Burkina Faso
    35. 35. Zambia
    36. 36. Liberia</li></li></ul><li>YOUR EXPERIENCES….<br />Multi-stakeholder Engagement for Improved Governance along the Value Chain<br />
    37. 37. Questions<br />Does the proposed program approach address needs on the ground?<br />What are your experiences with and examples of multi-stakeholder innovations that go beyond EITI and aim to improve transparency and accountability in the extractive sector?<br />Where do you see opportunities for multi-stakeholder engagement to address governance challenges along the value chain in your countries? Which kind of support would your organization need to better tackle these challenges?<br /> <br />Do you have case studies or other materials on your multi-stakeholder experiences that you can share and which would benefit other EI practitioners?<br />
    38. 38. Thank you!Michael D. JarvisPrivate Sector Development SpecialistWorld Bank Institutemjarvis@worldbank.orgTel. (202) 473-5383<br />
    39. 39. Transparency of policies, processes, decisions and information<br />
    40. 40. Ensuring effective monitoring<br />
    41. 41. Participation of those affected by extractive industries<br />